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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12357
Experience:  JD, MBA
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Ive been in Chapter 13 bankruptcy since August of 2007. I

Customer Question

I've been in Chapter 13 bankruptcy since August of 2007. I lost my job May 1st of this year and have been self employed. I owe more on my home than what it's worth. If I have to foreclose on it because of the economy will I have to pay the difference between what I owe and what the bank sells it for? Also how long before I have to move out once I foreclose? I live in Wisconsin.
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 8 years ago.

Hello and thank you for allowing me the opportunity to assist you.

Question: “If I have to foreclose on it because of the economy will I have to pay the difference between what I owe and what the bank sells it for? Also how long before I have to move out once I foreclose?”

Answer: Unfortunately, Wisconsin law does allow a lender to sue a debtor for a deficiency judgment (i.e. the difference between what you owe and the market value of the house when it’s sold). The foreclosure process itself will take between 6 months and a year depending on whether the lender seeks a deficiency judgment against you (if it does, then it takes longer…if it doesn’t, then its faster). However, even if the house sells, theoretically you do not have to move until you are evicted (which could take another month or two). Therefore, you probably have to move between 7 and 14 months after allowing the house to be foreclosed upon.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

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DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

Customer: replied 8 years ago.
I have Wells Fargo for both my mortgage/home equity do you know typically what they do when you have a deficiency?
Expert:  TJ, Esq. replied 8 years ago.

Hi again.

Unfortunately, I can't say what Wells Fargo typically does. But I will say that if the Wells Fargo doesn't think you can reasonably pay the deficiency (i.e. by looking at your income and assets), then it probably won't bother obtaining a deficiency judgment against you since it will only add to the time it takes to foreclose, as well as add to its own legal bills…and if you can’t pay, then it just wasted time and money.

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DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.